Section 8, good or bad?

I'm thinking about picking up some rental properties. But I keep reading that section 8 is good because its guaranteed money from the government. But are the people that you deal with good but poor or the scum of the earth? How much of their rent does the government cover?

I've had a 30 unit apartment building that was section 8 for about the last ten years. The best thing I ever did was get it off section 8.

Your biggest problem as a landlord won't be collecting rents or keeping units occupied. Your biggest headache is keeping the tenants from destroying the property and nickling and diming you to death every time they try to flush a goat head down the toilet and cock the plumbing up.

I used to deal with section 8. Terrible program. They still owe me money. I could tell you a pile of stories, but they all end the same way. I don't & won't do any third party payers. If you ever want to drag some of the worst people into your life, and you bought such a shit hole that there is no way to rent it, then maybe that would be a good program for that.

 

My advice - buy a nice property that you would stay in yourself and don't deal with that program.

I have several properties on section 8, never had issues with rent. The biggest issues you'll have are repairs. If you have a good property manager who is on it, section 8 is not different than any other rental.

I have several properties on section 8, never had issues with rent. The biggest issues you'll have are repairs. If you have a good property manager who is on it, section 8 is not different than any other rental.

 

 

Then you my friend are one of the luckiest people I have ever heard of. I have several friends that own in the multiple thousand units and they have all weened themselves off of section 8. There isn't enough room on the internet for me to be able to tell all my section 8 stories, getting paid is a bitch to say the least.

 

I guess it also depends on what region you're in.

Isn't modo big in to section 8? I'd be curious to hear his take.

Here is a typical story that just happened to my uncle, he has a rental house advertised and has no real experience being a landlord and a nice lady came to him and loved the house but told him her voucher only paid x amount but she really thought the house would be perfect and told him she would pay the difference personally in cash. Like an idiot he did the deal with her and they moved in and the second month he went to collect and she said what he did was illegal and to screw off or she would sue him. That is the type of shit you get to deal with from people that work the system.

Damn, sounds like no section 8 for me.

im having problems with my tenants in my rental property now! i can only imaging the horror stories from Section 8 residents.

Here is a typical story that just happened to my uncle, he has a rental house advertised and has no real experience being a landlord and a nice lady came to him and loved the house but told him her voucher only paid x amount but she really thought the house would be perfect and told him she would pay the difference personally in cash. Like an idiot he did the deal with her and they moved in and the second month he went to collect and she said what he did was illegal and to screw off or she would sue him. That is the type of shit you get to deal with from people that work the system.

 

The obvious answer here is know the laws before you make a committed business decision. I don't see this as the fault of the system or the tenant, he should have known better. There is a very clear defined set of rules and obligations for the tenant as well as the landlord, which are also subject to county by county rules if there is rent control, etc.

 

I have a number of rentals and don't really have many issues, it's all how you screen the tenants and what you allow them to get away with. I haven't done any section 8 yet, but i'm not against it either.

 

MODO has a lot of experience here, hopefully he will chime in.

You Rang???

 

Section 8, only works when the house is already a piece of shit. Because its going to turn into shit. Never rent a house that's been newly updated for section 8. Charge 20% more than comps. you can ask for cash on the side of your voucher. Be prepared to deal with the worst of the worst. No respect, no pride of ownership no sense of responsibility. But green is green, and if that government check bounces we got bigger issues.

 

best of luck.

Does the government cover the entire amount of the rent or only a portion? Is the amount of rent questioned or does Section 8 just go with whatever the landlord charges?

You Rang???

 

But green is green, and if that government check bounces we got bigger issues.

 

best of luck.

 

Here was one of my last conversations with the government: "hud is broke, we pay you this month and we pay the other guy the next month, sorry". It went on like this for nearly six months until I canceled the contract (hep I think) and removed my building from the section 8 program.

 

I also heard section 8 leases are subject to additional laws to protect tenant. Such laws include additional building codes etc.

 

I didn't do section 8. But even so the tenant threatened a lawsuit and left after 3 months based on building code claims. Weird enough, my house wasn't modified but still required several grand of retrofits.

Does the government cover the entire amount of the rent or only a portion? Is the amount of rent questioned or does Section 8 just go with whatever the landlord charges?

 

It all depends on the monthly income that the tenant makes, the more destitute you are the more rent they cover.

 

Here is my opinion on tenants with or without section 8. If you know and understand the system it works perfectly, I've had sec 8 tenants that screwed me on their small portion of $100 from $800 rent, then I've had non sec 8 tenants both husband and wife with full time jobs screw me for a couple months at $1k a month. It doesn't matter there are honest people that pay their debts and there are plenty that will leave you high and dry. If they are risky I'll ask for a double deposit.

Section 8 pays like clockwork with an ACH to my account on the 1st of the month. They prorate the first month and always pay the full month on the exit, so always have them out from the 2nd to 15th.

 

Most of the tenants are single moms just struggling to survive, I keep my units clean and nice with security cameras for their protection and for my eyes. Also section 8 does yearly inspections as well as when they move in, so they keep the units safe and up to par, if it doesn't pass and you don't fix the issues after 30 days, no check from section 8.

 

Of course every city and every part of a city is different, what works for me may not work for you.

Thank you for clarifying. Of course you will get the good and bad, happens everywhere. I have been thinking about getting a 2 or 3 family property and renting it just want to get other finances in place before I do. I know people who make a killing with section 8 and I also know people who had such a bad experience they just sold the property instead of switching off of S8.

 

For example the house was decent when he started renting it. Few months later at the inspection Section 8 told him the toilet bowl was broken off the floor, windows were messed up, etc. This happened a few times and he just dumped the property. Instead of removing the tenants from the program he was responsible for everything. That is what scares me.

From my personal experience with rental properties it is not the rent that you make the money from, it is the appreciation of the property, as an example years ago I purchased 2 properties in different states for a similar purchase price, (both were around 150k) rented both for almost 15 years and mortgages were paid down a bit but 15 years later one was worth 350k and the other was still worth in the 185k range. Rent on the one had a great positive cash flow but the other pretty much just covered itself. Be picky when you chose location.

I have a rule, I never hold realestate where people put their head down to go to sleep.

I never hold residential properties in my rent pool, never deal with retail customers, majority of retail people are very demanding, careless and disrespectful.

 

I realize somebody has to do it but it isn't going to be me, I do not care how much it pays.

 

The other aspect of it is, I wouldn't have the heart to kick out a struggling family with children, kicking out a business I have no issues with.

 

This section 8 thing sounds like a massive PITA!

also think about who visits section 8 tenants. The flies that come along with shit are sometimes more annoying.

Location and demographics are important to this questions but overall section 8 is shit, invest in low income housing where the people are truly honest and hard working people ( and yes that demographic does exist).